Calculate the present value (PV ) of an annuity stream of 5 annual cash flows of $1,200, with the first cash flow received in one year

Calculate the present value (PV ) of an annuity stream of 5 annual cash flows of $1,200, with the first cash flow received in one year, assuming a discount rate of 10%.

Expert Solution

present value (PV ) of a cash inflow	4,548.94
Statement showing Cash flows
Particulars	Time	PVF 10%	Amount	PV
Cash Flows	1.00	0.9091	1,200.00	1,090.91
Cash Flows	2.00	0.8264	1,200.00	991.74
Cash Flows	3.00	0.7513	1,200.00	901.58
Cash Flows	4.00	0.6830	1,200.00	819.62
Cash Flows	5.00	0.6209	1,200.00	745.11
Present value of Cash flows				4,548.94

jeff jeffy answered 2 years ago

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